Saturday

25th May 2019

Merkel wants 'permanent' supervision of Greece, warns of war

  • 'Nobody should take peace for granted,' says Merkel (Photo: Valentina Pop)

Peace should not be taken for granted if the euro fails, German chancellor Merkel told MPs Wednesday (26 October) ahead of the eurozone summit where an increase of the bail-out fund firepower may lead to Germany's own state assets being taken as collateral.

In a dark blue jacket reflecting the mood in and about the eurozone, Merkel abandoned her usual cautious rhetoric warned outright of a war.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"Nobody should take for granted another 50 years of peace and prosperity in Europe. They are not for granted. That's why I say: If the euro fails, Europe fails," Merkel said, followed by a long applause from all political groups.

"We have a historical obligation: To protect by all means Europe's unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail."

"It cannot be that sometime in the future they say the political generation responsible for Europe in the second decade of the 21 century has failed in the face of history," the chancellor continued.

She was asking for the parliament's "political" green light on a negotiation mandate for the EU summit, beginning later today in Brussels. The summit is seeking to increase the firepower of the €440 billion-strong European Financial Stability Facility (EFSF) to stop the sovereign debt crisis spreading to countries like Italy and ultimately, France.

The Bundestag approved the measure by a large majority, with 503 members in favour, 89 opposing and four abstaining.

German 'risks'

While stressing that Germany's contribution to the EFSF loan guarantees would continue to be capped at €211 billion, she said she could not exclude there may be "risks" for Germany linked to the EFSF increase of firepower. Her own party colleagues had demanded that she clearly excludes German state assets, such as the central bank's gold reserves, to be put as collateral for the EFSF lending power.

"Nobody can clearly estimate if there will be such risks. What I can say is that we cannot exclude it," she said, insisting that the current situation is pushing European leaders into "uncharted territories".

"Not to take these risks would be irresponsible. There is no better and more sensible alternative. Europe and the world are looking at Germany," the chancellor said.

Looking ahead to the summit, the chancellor repeated her long-standing stance that "there is no silver bullet, no simple solutions. We will still deal with these topics for years from now."

She repeated her insistence that the EU treaty had to be changed, in the medium term, to be more strict on countries breaching the euro deficit rules.

"Where does it say that any treaty change has to take 10 years or that there should be no more changes after the Lisbon Treaty," she asked.

EU leaders last Sunday agreed to have an evaluation presented to them in December by council chief Herman Van Rompuy about the possibility for a "limited" treaty change.

'Permanent supervision' for Greece

On the three euro-countries currently propped by EU-IMF loans, Merkel said Ireland was on "the right path", Portugal showed it could implement the promised reforms, while Greece was still "at the beginning of a long road."

For the first time, as opposition MPs noted later on in the debate, Merkel had words of praise for the ordinary Greek citizens feeling the brunt of the austerity measures demanded by international lenders. "People in Greece have to stomach a lot of sacrifices. They deserve our respect and also a sustainable growth perspective in the eurozone."

According to the latest report of the so-called troika, consisting of experts sent from the European Commission, the European Central Bank and the International Monetary Fund, Greece will need even higher debt restructuring and losses for private lenders compared to what EU leaders had agreed upon on 21 July.

"But debt restructuring alone does not solve the problem. Painful structural reforms have to be made, otherwise even after debt restructuring we're back to where we are today," Merkel warned.

That's why, she said, Greece would have to be "assisted" for quite some time. "It's not enough that the troika comes and goes every three months. It would be desirable to have a permanent supervision in Greece," she said, adding that this issue would be brought up at the summit.

In return for what seems to be an unprecedented sovereignty loss in an old EU member state, Merkel promised German investments and mentioned a meeting of local representatives from Germany and Greece in the coming weeks.

"We want Greece to be back on its feet again as soon as possible and will do everything we can to this end," she concluded.

Her junior coalition party, the Liberal Free Democrats (FDP), had less sympathy for Greece, however. Rainer Bruederle, leader of the FDP group, said that the troika had given Athens a "D" and that "nobody expects Greece to turn into an A student over night," as it was now just like eastern-European transition countries 20 years ago.

Sticking to the teacher-pupil metaphor, Bruederle urged Greeks to "do their homework" and said the country could not be funded endlessly like a "bottomless pit".

The leftist opposition was outraged, with Die Linke leader Gregor Gysi pointing out that austerity has forced 27,000 small and medium enterprises to go bankrupt in Greece and that teachers earn as little as €1,000 a month. "What more do you want from them? Do you want them to starve to death?" he said.

Merkel outlines steps to 'stability union'

German Chancellor Angela Merkel has called for a "stability union" in which all member states behave in a fiscally responsible manner and miscreants can be brought before the EU’s highest court.

Germany makes Greece pay with sovereignty for new bail-out

Greek sovereignty was taken down another peg by eurozone leaders on Thursday, as Germany demanded a "durable" supervision on the ground of its economic policy-making under the terms of a second €130 billion bail-out.

Poland fears German 'inactivity' more than German power

Poland has issued an extraordinary appeal to Berlin to do all it takes to save the eurozone, saying that only Germany can manage the task and has a "special responsibility" to do so given its history.

Europe still has 'sleeping war demons'

Former Eurogroup chief Jean-Claude Juncker has warned of "sleeping war demons" in Europe and compared the current situation to the year before the outbreak of the first world war, when everybody took peace for granted.

News in Brief

  1. UK's May announces June 7 resignation date
  2. Ireland votes for EU election and divorce referendum
  3. Report: May to announce resignation plan on Friday
  4. Leading politicians: time for EU to have female leaders
  5. Poll: Finland's Green party to surge in EU elections
  6. High demand for postal voting in Denmark
  7. Some EU citizens turned away at UK polling stations
  8. Switzerland unlikely to sign draft EU deal

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. Irish greens take Dublin in second EU exit poll
  2. EU election results to trigger top jobs scramble This WEEK
  3. Don't tell the Dutch - but Timmermans 'won'
  4. EU says goodbye to May with 'respect'
  5. Strache scandal: how big a hit will Austrian far-right take?
  6. Italy train row exposes competing views of EU
  7. Dutch socialists on top in first EP election exit poll
  8. No usage data kept for EU parliament's 'Citizens' App'

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic commitment to driving global gender equality
  2. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  3. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  4. Nordic Council of MinistersNordic talks on parental leave at the UN
  5. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  6. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  7. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  8. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  9. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  10. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  11. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  12. Nordic Council of MinistersNordic ministers take the lead in combatting climate change

Join EUobserver

Support quality EU news

Join us